From Hotel Boom to Legal Bottlenecks: What Developers Must Know in 2025

The UK’s hotel and leisure development pipeline is showing no signs of slowing down. From luxury lifestyle brands expanding into secondary cities, to the transformation of heritage buildings into boutique hotels — 2025 is shaping up to be a record year for hospitality investment. Yet behind the architectural ambition and investor confidence lie complex legal risks that can stall or derail even the best-laid projects.

At John & Partners, we work closely with hotel developers, institutional investors, and operators across the UK. Here are the top legal pressure points we’re helping clients navigate this year:

1. Strata & Mixed-Use Compliance Is Now a Deal-Breaker

Developers are increasingly favouring mixed-use schemes — combining hotel, residential, and commercial units under one roof. However, few realise the planning and legal complexity involved in strata arrangements, long-lease structuring, and service charge apportionment.

“We’ve seen projects delayed by months due to overlooked vertical zoning issues,” says James O’Connell, Partner at John & Partners. “Early legal input into site acquisition and architectural planning is no longer optional — it’s essential.”

2. Construction Contracts Must Account for Global Supply Risk

Post-Brexit and post-COVID disruptions continue to affect materials sourcing, labour availability, and construction timelines. These variables must be built into JCT and FIDIC contracts from the outset — particularly with bespoke hotel fit-outs that often involve imported finishes.

“Force majeure clauses alone won’t cut it in 2025,” O’Connell warns. “We’re helping clients negotiate more robust delay and pricing mechanisms tied to real-world volatility.”

3. Brand Control vs Owner Flexibility in Hotel Management Agreements

Negotiating with major hotel brands is no small feat. Owners often underestimate how long-term hotel management agreements can limit operational control, asset disposal, or redevelopment options down the line.

“Balancing brand standards with exit flexibility is one of the hardest parts of these deals,” says O’Connell. “We structure agreements that preserve asset value without sacrificing performance.”

4. Sustainability Clauses Are Becoming Market Standard

With ESG-linked finance gaining traction, hospitality developers now face pressure from both lenders and guests to incorporate green building standards, carbon disclosures, and energy efficiency metrics into legal contracts.

We’re helping clients future-proof agreements by embedding BREEAM, LEED, and green lease terms — not as add-ons, but as core elements of the deal structure.

Conclusion

The hospitality boom in the UK is real — but so is the legal complexity that comes with it. At John & Partners, we ensure your hotel development isn’t just ambitious, but bankable, buildable, and bulletproof from a legal standpoint.

📩 To speak to our Hospitality & Real Estate team, contact James O’Connell at John & Partners.